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Speech By Mrs Lim Hwee Hua, Minister In Prime Minister's Office And Second Minister for Finance And Transport At The 2010 Enterprise 50 Awards Presentation And Gala Dinner

04 Nov 2010

Mr Alvin Tay
Editor, The Business Times

Mr Tham Sai Choy
Managing Partner Designate, KPMG, Singapore

Distinguished guests
Ladies and gentlemen,

1.         Good evening. I am very pleased to join you this evening for the 2010 Enterprise 50 Awards. I am especially happy to be here amidst more optimistic circumstances. At this time last year, we were only beginning to cautiously hope for recovery from the severe economic crisis that hit us in 2008. But there has been a strong and relatively quick rebound. As a result, we are seeing significant economic growth as we emerge from the crisis.

2.         Our local enterprises play an important role in this happy picture. Over the past few years, local SMEs have been a constant driving force in Singapore's economic development, contributing about half of our GDP and employing about 60% of the labour force. During the financial crisis, businesses collaborated closely with Government and the unions to preserve jobs – which helped us avoid the surge of unemployment seen in other countries – and many stayed viable through the crisis.

3.         So, notwithstanding some lingering uncertainty on the global front, I think we have reason to be in high spirits tonight, as we honour this year's E50 award winners for their vision, creativity, and contributions to the economy; as well as the business community at large for the resilience through these turbulent times.

A Time of Opportunity

4.         You are all familiar with the saying, adapted from the Chinese proverb, that "with crisis comes opportunity". It has direct relevance to us at this critical juncture, where a global crisis has given way to a time of opportunity, in emerging markets and particularly in Asia.

5.         Let me explain why I think we are still in this time of opportunity. The emerging world – China, India, South-east Asia, Latin America and parts of Eastern Europe – will collectively account for at least half of all economic growth. We are well-positioned to take advantage of this new phase of growth, due to our favourable geographical position and strong economic ties to the region.

6.         There are countless opportunities to be tapped, but today I will just touch briefly on two primary areas that might be worth thinking about. The first area is the growth of demand in emerging markets. As the middle class expands and purchasing power increases, there will be more opportunities for internationalisation.

7.         Today, about two-thirds of our SMEs venture abroad, primarily to other countries in Asia. There will be great scope, going forward, for more local enterprises to establish a greater overseas presence, and derive a higher share of their turnover from these markets. And I can assure you that Government agencies like IE and SPRING will continue to support and facilitate such overseas ventures.

8.         The second area of opportunity lies in actively exporting more of our expertise overseas. With the growth in emerging markets comes the development of emerging market-cities. Today, less than 1 billion people live in emerging market-cities. This number is expected to more than double within the next 20 years.

9.         As emerging market-cities develop, so will their need for expertise in areas such as city planning, financing, operation and management of infrastructure increase. It is estimated that these cities will require up to $40 trillion in infrastructure expenditure over the next 20 years. Many of our SMEs – including several of those receiving awards today – are already well-poised to take advantage of these opportunities.

Building Capabilities

10.         But these opportunities will not come easily. Companies that venture overseas must be prepared to grapple with a higher level of complexity and withstand a higher level of risk. To do so, they will need good leaders who are able to adapt their local knowledge and expertise to the different contexts. They will also need to generate, within their organisations, a healthy culture of innovation and creativity, which will allow them to cope with complex environments.

11.         Recognising some of these challenges, the Government provides support to our companies' internationalisation efforts, whether it is in capability development, or in market access programmes. For example, the SME Market Access Programme was launched under IE Singapore earlier this year. The programme helps SMEs defray certain third-party costs[1] when they venture into new markets. Nevertheless, key success factors for internationalisation would ultimately remain within the company, in areas such as entrepreneurial drive and enterprise innovation.

Enterprise 50 Awards

12.         We want our economy to be driven by dynamic enterprises that are adventurous, innovative, and place a strong emphasis on developing human capital. We also need a diverse and vibrant corporate landscape with strong partnerships among companies, so that new ideas can be continually generated, developed, and realised.

13.         The Enterprise 50 companies here tonight are some of the best examples of the sorts of companies that we need in Singapore, to capture emerging markets in Asia while fostering a vibrant and resilient corporate sector at home. Let me highlight a few of them. There's Kenyon Pte Ltd, which specialises in turnkey projects and has recently established regional offices in Tianjin, Suzhou and Chengdu. Next, we see how Cathay Cineplexes has expanded from the traditional cinema business to other related businesses such as advertising and event management, and has recently entered the Middle East market. Finally, Yew Choon Pte Ltd, an on- and off-shore heavy lift transportation specialist, caters to markets in many places - Bangladesh, Malaysia, China, Indonesia and Vietnam.

14.  To the winners, I offer my heartiest congratulations. We are counting on you to be role models for the SME sector in Singapore, and I hope you will continue to excel and push the boundaries in your respective fields. I wish you every success. Thank you.

[1] Qualifying Activities:
1. Third Party Professional Services in identifying distributors/partners, start-up professional fees, drafting and submission of legal documents
2. Engagement/Retainer fees for distributors/export agents
3. Product listing fees, showcasing costs
4. Clinical trials, testing, certifications leading to entry into new market, trials/pilot, proof of concept,
5. Product adaptation